Key Insights

• Sinofortune Financial Holdings to hold its Annual General Meeting on 25th of June
• Salary of HK$1.80m is part of CEO Jiawei Wang's total remuneration
• The overall pay is comparable to the industry average
• Sinofortune Financial Holdings' EPS grew by 16% over the past three years while total shareholder loss over the past three years was 60%

The underwhelming share price performance of Sinofortune Financial Holdings Limited (HKG:8123) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 25th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Comparing Sinofortune Financial Holdings Limited's CEO Compensation With The Industry

Our data indicates that Sinofortune Financial Holdings Limited has a market capitalization of HK$77m, and total annual CEO compensation was reported as HK$1.8m for the year to December 2023. This was the same amount the CEO received in the prior year. In particular, the salary of HK$1.80m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Specialty Retail industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.7m. So it looks like Sinofortune Financial Holdings compensates Jiawei Wang in line with the median for the industry. Moreover, Jiawei Wang also holds HK$21m worth of Sinofortune Financial Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Sinofortune Financial Holdings has gone down a largely traditional route, paying Jiawei Wang a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Sinofortune Financial Holdings Limited's Growth

Over the past three years, Sinofortune Financial Holdings Limited has seen its earnings per share (EPS) grow by 16% per year. In the last year, its revenue is down 17%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Sinofortune Financial Holdings Limited Been A Good Investment?

Few Sinofortune Financial Holdings Limited shareholders would feel satisfied with the return of -60% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Jiawei receives almost all of their compensation through a salary. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Sinofortune Financial Holdings that investors should think about before committing capital to this stock.

Switching gears from Sinofortune Financial Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com